SSAS in a nutshell – a basic overview of the Small Self-Administered Scheme
SSAS stands for Small Self-Administered scheme. It offers unparalleled strategies for funding and growing your business, investing in property, mitigating IHT, growing your retirement fund, creating a legacy, and much more. It allows you to take control of your pension funds before age 55, providing control and flexibility simply not available via any other UK pension scheme. To help you get started on your SSAS journey, we have condensed all the key information you need about this innovative scheme here.
- The SSAS is a corporate pension, exclusively available to business owners
- It must be registered and comply with HMRC and The Pensions Regulator rules and regulation
- The SSAS has existed for over 50 years, originating from the Finance Act of 1973
- It was devised by Government to give business owners more control over their whole financial situation
- It is the most versatile and flexible pension scheme in the UK
- It can have up to 11 members made up of other directors of the company, employees, or family members
Business owners are failing to take advantage of the one thousand plus tax advantages and benefits available!
With a SSAS pension, you can take control of your existing frozen or dormant pensions, pool them in one place, and use the funds for more flexible investment opportunities – even before the age of 55. It gives business owners the control to decide for themselves how their pension funds are invested. Some options include:
- Commercial property
- Land
- Green investments
- Stocks and shares
- Gold
- Investment in your own business
- Loans to unconnected 3rd parties
A variety of strategies can be employed with a SSAS pension to help business owners achieve their specific goals, whether that be property investment, funding your business, succession planning, greater pension growth, early retirement or creating a legacy for your family – all with ultimate tax efficiency!
SSAS Strategies
- A tax-efficient wrapper for property investment
- Invest in tangible assets
- Purchase your business premises:
– Rent to your business – this is a business expense so is afforded Corporation Tax benefits
– The rent received by the SSAS is not liable for income tax
– Continues to grow your pension pot
– If you sell the property eventually, the SSAS does not pay Capital Gains on the profit - Multiple property investment options, such as commercial property, development land, or hands-off property investment
- Align your pension with your business strategy
- Increase control over funds as well as investment choice
- Loan up to 50% of your pension pot to your company:
– Pay loan back into your pension over 5 years
– Choose your own interest rate (at least 1% above market rate)
– Reduce year-end profits which reduces Corporation Tax
– Provide cashflow
- Cascade SSAS pension funds and assets down through family, free of Inheritance Tax
- Members elect their chosen beneficiaries
- Upon the death of a SSAS member, benefits within the SSAS can be paid at the discretion of the remaining trustees
- As these are held in the SSAS, outside of the estate, they are not liable for Inheritance Tax
- Achieve smooth, hassle-free succession planning and early retirement
Combining a SSAS with a Family Investment Company
By combining the SSAS with a Family Investment Company as a Lifetime Business Tax Plan, company directors can radically mitigate tax, grow and protect wealth, and ring-fence assets.
A Family Investment Company is a private company, set up similarly to any other but with different rules applied to ensure the company invests, as opposed to trades. Cash can be moved into the company and then invested in any asset class from property to shares, and tax is only applied to the gains made through the investments, not the actual cash held.
Combined as a Lifetime Business Tax Plan, company directors can:
- Ensure their trading company does not inadvertently become an investment company, therefore breaking HMRC rules and losing their Business Property Relief (BPR)
- Invest and/or hold company cash
- Protect family wealth and assets
- Combine all of your pensions into one pot
- Pool funds with family or company members
- Ring-fence assets for inheritance
- Transfer in and take control of former work pensions
- Transfer in company and pension cash
- Achieve wide investment choices in a tax-efficient plan
- Achieve smooth, hassle-free succession planning and early retirement
Invest in property, grow your company, create robust succession plans, and mitigate Inheritance Tax.
